8-KAcquisitions & DispositionsFinancial EventsOther Events+1

WESTERN DIGITAL CORP 8-K Report, Acquisition Completed (Sep 5, 2007)

Filed September 5, 2007For Securities:WDC

Summary

Western Digital Corporation (WDC) announced the successful completion of its acquisition of Komag, Incorporated (Komag) on September 5, 2007. The acquisition was structured as a two-step transaction involving a tender offer, which closed with over 95% of Komag's shares tendered and accepted, followed by a merger. This strategic move integrates Komag, a provider of magnetic media for hard drives, into Western Digital's operations, likely aiming to enhance its product portfolio and market position within the hard drive industry. The financing for this acquisition was primarily funded through a combination of Western Digital's working capital and a significant debt financing facility, specifically a $750.0 million Bridge Facility. This highlights the company's commitment to this strategic growth initiative and its ability to secure substantial funding. Additionally, as a consequence of the acquisition, Western Digital will be issuing a Fundamental Change Notice to holders of Komag's 2.125% Convertible Subordinated Notes due 2014, giving them the option to redeem their notes.

Key Highlights

  • 1Western Digital Corporation (WDC) has successfully completed its acquisition of Komag, Incorporated (Komag) as of September 5, 2007.
  • 2The acquisition was executed through a two-step process: a cash tender offer followed by a merger, with WDC acquiring over 95% of Komag's outstanding shares in the tender offer.
  • 3The purchase price was $32.25 per share, paid in cash, for all tendered shares.
  • 4Western Digital funded the acquisition through a $750.0 million Bridge Facility, alongside existing working capital.
  • 5Following the merger, Komag, Inc. becomes an indirect wholly-owned subsidiary of Western Digital and has been renamed WD Media, Inc.
  • 6Holders of Komag's 2.125% Convertible Subordinated Notes due 2014 will receive a Fundamental Change Notice, offering them the right to have their notes purchased.
  • 7The company will file the acquired business's financial statements and pro forma financial information at a later date, within 71 calendar days of this filing.

Frequently Asked Questions

This 8-K filing primarily serves to announce the official completion of Western Digital's acquisition of Komag, Incorporated. It details the closing of the tender offer and merger, the final share percentages acquired, the purchase price, and the financing used for the transaction.

The acquisition was financed through a combination of Western Digital's existing working capital and a substantial debt financing. Specifically, Western Digital borrowed approximately $750.0 million under a Bridge Facility arranged by financial institutions including Goldman Sachs Credit Partners L.P., Citigroup Global Markets Inc., and JPMorgan Chase Bank, N.A.

As the acquisition constitutes a 'Fundamental Change' for Komag, Western Digital will cause Komag to issue a Fundamental Change Notice to the holders of its 2.125% Convertible Subordinated Notes due 2014. This notice will give noteholders the option to require Komag to purchase their notes at a price equal to 100% of the principal amount plus accrued interest.

Western Digital has stated that the financial statements of the acquired business (Komag) and the related pro forma financial information will be filed in subsequent amendments to this Form 8-K, no later than 71 calendar days from the filing date of this report.